Nearly two months after the implementation of the India-UK CETA, India has approved tariff-rate quota (TRQ) for 642 vehicles for the UK Car Imports.
The Directorate General of Foreign Trade (DGFT) has allocated this to seven companies, allowing eligible UK-origin cars to enter India at concessional customs duty.
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The Comprehensive Economic and Trade Agreement (CETA) between India and the UK came into effect on 15 July 2026. The automotive provisions of this agreement aim to gradually reduce import duty on eligible UK-origin vehicles, but this benefit will be available only within specified quotas and eligibility conditions.
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DGFT Issues Quotes to Seven Companies
In July, the DGFT invited TRQ applications to import fully-built passenger cars and goods vehicles from the UK. According to the government, eight companies submitted applications, of which seven were approved.
A total quota of 642 passenger cars has been approved for these seven companies. One applicant was issued a deficiency certificate, meaning the required documentation or information in their application was incomplete.
This allocation is for the remaining period of 2026, as CETA was implemented mid-year, on July 15th. According to reports, the DGFT invited applications for a quota of roughly 5,000 vehicles in the initial application process, while a wider pro-rata 2026 passenger-car TRQ is estimated to be around 10,480 units.
How will import duty on UK cars be reduced?
A phased tariff reduction framework has been established for UK-origin internal-combustion-engine (ICE) passenger cars under the India-UK CETA.
According to the official tariff schedule, the first-year annual quota is 20,000 ICE passenger cars. This quota is divided into three categories based on engine capacity.
| Engine Category | First-Year Quota | In-Quota Duty |
|---|---|---|
| Petrol above 3,000cc / Diesel above 2,500cc | 10,000 | 30% |
| Petrol 1,500–3,000cc / Diesel up to 2,500cc | 5,000 | 50% |
| Petrol up to 1,500cc | 5,000 | 50% |
| Total | 20,000 | — |
According to the official schedule, the base customs duty on large-engine vehicles reduces from 110% to 30% in the first year, while other specified ICE categories have a 50% in-quota duty from a 66% base rate. Tariffs further reduce in subsequent years and reach 10% for specified categories in the fifth year.
Why is the approval of 642 cars important?
This is the first allocation of the 2026 quota since the implementation of CETA. However, the approval of 642 units is significantly smaller than the available quota. According to reports in Business Standard and Mint, a large portion of the available quota was not initially utilized due to limited applications.
This also means that CETA’s impact on the prices of UK-origin premium cars in India will not be immediate or universal. Concessional duty will only apply to eligible vehicles within the approved TRQ quantity. Vehicles imported outside the quota will continue to be subject to applicable normal tariffs.
Who Can Apply?
Not every importer is automatically eligible for the TRQ benefit. According to the rules, OEMs, authorized dealers, and OEM-authorized channel partners can apply for quotas for UK-origin vehicles.
To claim the concessional tariff, the vehicle must meet the agreement’s origin requirements and submit the required documentation during the import process.
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What benefits will premium cars from the UK enjoy?
Many premium and luxury vehicles in India are manufactured or assembled in the UK. CETA tariff concessions may impact the landed costs of eligible UK-origin models, particularly high-value cars where the impact of existing import duties is significant.
However, the 642-unit quota should not be seen as a price cut announcement for 642 cars in India. Actual customer pricing will depend on the manufacturer’s model, ex-factory value, logistics, taxes, dealer margin, and available TRQ allocation.
Different Rules for Electric Cars
CETA’s automotive concessions framework for EVs, hybrids, and hydrogen-powered passenger vehicles is different from that for ICE cars. There are restrictions for these powertrains in the initial years, and limited concessions are introduced in later years.
Therefore, the current 642-car allocation would be better understood primarily in the context of the conventional/ICE passenger-car TRQ mechanism.
UK Car Imports- Auto India Daily Verdict
The automotive chapter of the India-UK CETA could gradually change the import economics of UK-origin cars into India. Currently, approval of 642 vehicles is an initial step after implementation of the agreement, not full quota utilization.
The extent to which manufacturers and authorized importers utilize this quota will be crucial. Furthermore, the actual benefit of the concessional duty will be passed on to consumers, depending on the pricing strategy of individual models.
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Raj Prajapati is a Senior Automotive Content Writer at AutoIndiaDaily. A B.Tech graduate in Computer Science and Engineering, he leverages over four years of experience covering Indian car and bike launches, EV tech, and market dynamics to break down complex automotive regulations into simple consumer guides. Specialising in Indian motor vehicle laws, IRDAI updates, and ownership costs, Raj translates technical auto policies into actionable advice for everyday drivers.